Edwin's Gerace's Real Estate and Economic Solution

I have observed something interesting in the real estate market although extremely complex. The continuing economic mistakes have created unprecedented consequences in an industry that has been known for its stability and predictability. These errors need major corrections for the healing to begin. The correction needed cannot be implemented without critical financial adjustments.

There is an abundant supply of homes in Lexington, Chapin/Ballentine, Forest Acres, Irmo, Lake Murray area, and other parts of Lexington and Richland County. I have several blog posts about
South Carolina market conditions, HUD’s attempt to help Home Buyers, News about Real Estate in South Carolina and other Real Estate in 2009. The questions most frequently asked me are: “Are houses selling? And “What is going to happen to house values?

As an experienced Realtor, my opinion is that corrections are necessary and crucial to recovery. The timely recovery of the real estate market requires corrections but these corrections must be joint efforts of the real estate industry and banks/financial institutions. It has to be a joint effort for recovery to occur in a timely manner.

The following are Edwin Gerace’s five steps for recovery of the real estate market:

1. Keep mortgage rates under 6% with no large swings in the rates. (With large swings in the rates people may be motivated to refinance but that does not stimulate the real estate market,) For todays interest rates email me.

2. It is mandatory for banks to work quickly with Realtors, sellers, buyers and other parties on “short sales”. The current “short sale” process is a perceived as a nightmare. Qualified buyers back off. This does not help the people that need it the most. Policies that are pro buyer and pro moving intentory need to be created and mandated.

3. Halt all foreclosures if home is occupied and mandate the bank to work with local Realtors to create a timely “short sale” opportunity for qualified residential buyers. This keeps owners in their home and not on the streets. This forces banks to work for solutions because when banks foreclose, homeowners are out and the bank “fire sales” the home, market values drop and everyone loses. It is a lose-lose proposition.

4. There needs to be some type of incentive program for Unfinished construction on the market to be completed. This way, banks can sell a finished product. The typical buyer is not interested in buying a ½ finished house. There is slim chance of getting a loan on the ½ finished house. The net effect of doing nothing with these homes is the property values of the surrounding homes fall and the unfinished home condition declines. Another lose-lose situation. With an incentive program for a builder to complete the house, the net effect will be a builder with work, bank sells house, and neighbors don’t lose property value.

5. Banks to have system in place to lend money. The model that worked 2 years ago( lending to anyone with a pulse, no down payment and inflated apprasials) contributed to the current financial crisis. The present model is not the answer either going to the extreme of tightening the credit requirements and requiring large down payments. This knee-jerk reaction has scared off potential buyers and is no help in reviving the real estate market. We might need to find a banking policy model from 8-10 years ago that worked with people that had credit issues to secure a loan that is fair to all parties, banks and consumers.

I Feel the government and the lenders put people in situations that led to the situation that we are in. We need a team approach to get us back on our 2 feet.

These are the views of Edwin Gerace and only Edwin Gerace.

Feel free to comment and post your thoughts and ask Edwin questions by sending email to him